Herc Holdings Inc. (NYSE: HRI) (the “Company”) today announced
that it has priced $1.2 billion aggregate principal amount of 5.50%
Senior Notes due 2027 (the “notes”) in a private offering exempt
from the registration requirements of the Securities Act of 1933,
as amended (the “Securities Act”). The size of the offering was
increased by $200 million from the previously announced offering
size of $1.0 billion. The closing of the offering is expected to
occur on or about July 9, 2019, subject to customary closing
conditions.
The notes will be senior unsecured obligations of the Company
and interest will be payable semi-annually in arrears. The notes
will be guaranteed on a senior unsecured basis, subject to limited
exceptions, by the Company’s current and future domestic
subsidiaries, including Herc Rentals Inc. (“Herc”).
The net proceeds from the sale of the notes are expected to be
used to redeem all $864.5 million aggregate principal amount of
Herc’s outstanding senior secured second priority notes, to
partially repay indebtedness outstanding under Herc’s asset-backed
revolving credit agreement (the “ABL Credit Facility”) and to pay
related fees and expenses.
Following the offering, the Company expects to refinance the ABL
Credit Facility in order to, among other things, add Herc Holdings
Inc. as a borrower, extend the maturity date from 2021 to 2024 and
allow the U.S. borrowers to borrow thereunder based on the value of
assets owned by Canadian subsidiaries that are included in the
borrowing base. The aggregate principal amount of the commitments
under the ABL Credit Facility will remain unchanged. There can be
no assurances that the Company will refinance the ABL Credit
Facility on the terms described herein or at all.
This press release does not constitute an offer to sell or the
solicitation of an offer to buy the notes, nor will there be any
sale of the notes in any state or other jurisdiction in which such
offer, solicitation or sale would be unlawful. The offer and sale
of the notes have not been and will not be registered under the
Securities Act, or the securities laws of any other jurisdiction,
and may not be offered or sold in the United States absent
registration or an applicable exemption from registration
requirements. The notes were offered only to qualified
institutional buyers under Rule 144A under the Securities Act and
to non-U.S. persons in offshore transactions in compliance with
Regulation S under the Securities Act.
About Herc Holdings Inc.
Herc Holdings Inc., which operates through its Herc Rentals Inc.
subsidiary, is one of the leading equipment rental suppliers with
approximately 270 locations, principally in North America. With
over 50 years of experience, we are a full-line equipment rental
supplier offering a broad portfolio of equipment for rent. Our
classic fleet includes aerial, earthmoving, material handling,
trucks and trailers, air compressors, compaction and lighting. Our
equipment rental business is supported by ProSolutions™, our
industry-specific solutions-based services, which includes power
generation, climate control, remediation and restoration, and
studio and production equipment, and our ProContractor professional
grade tools. Our product offerings and services are aimed at
helping customers work more efficiently, effectively and safely.
The Company has approximately 4,900 employees. Herc Holdings’ 2018
total revenues were approximately $1.98 billion.
This release contains statements that are not statements of
historical fact, but instead are forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. When used in this release, the words “estimates,” “expects,”
“anticipates,” “projects,” “plans,” “intends,” “believes,”
“forecasts,” and future or conditional verbs, such as “will,”
“should,” “could” or “may,” as well as variations of such words or
similar expressions are intended to identify forward-looking
statements, although not all forward-looking statements are so
designated. Forward-looking statements include our expectations
regarding the closing of the offering and the use of proceeds
therefrom, and the refinancing of the ABL Credit Facility and the
terms thereof. We caution readers not to place undue reliance on
these statements, which speak only as of the date hereof.
There are a number of risks, uncertainties and other important
factors that could cause our actual results to differ materially
from those suggested by our forward-looking statements, including:
(1) risks related to the offering, including the effect of the debt
markets on the offering and the Company’s ability to satisfy the
closing conditions to the offering; (2) business risks, including:
the cyclicality of our business and its dependence on levels of
capital investment and maintenance expenditures by our customers; a
slowdown in economic conditions or adverse changes in the level of
economic activity or other economic factors specific to our
customers or their industries, in particular, contractors and
industrial customers; our business is heavily reliant upon
communications networks and centralized IT systems and the
concentration of our systems creates or increases risks for us,
including the risk of the misuse or theft of information we
possess, including as a result of cyber security breaches or
otherwise, which could harm our brand, reputation or competitive
position and give rise to material liabilities; we may fail to
maintain and upgrade our IT systems; we may fail to respond
adequately to changes in technology and customer demands; intense
competition in the industry, including from our own suppliers, that
may lead to downward pricing or an inability to increase prices;
our success depends on our ability to attract and retain key
management and other key personnel, and the ability of new
employees to learn their new roles; any occurrence that disrupts
rental activity during our peak periods, given the seasonality of
the business, especially in the construction industry; some or all
of our deferred tax assets could expire if we experience an
“ownership change” as defined in the Internal Revenue Code; doing
business in foreign countries exposes us to additional risks,
including under laws and regulations that may conflict with U.S.
laws and those under anticorruption, competition, economic
sanctions and anti-boycott regulations; changes in the legal and
regulatory environment that affect our operations, including with
respect to taxes, consumer rights, privacy, data security and
employment matters, could disrupt our business and increase our
expenses; an impairment of our goodwill or our indefinite lived
intangible assets could have a material non-cash adverse impact;
(3) other operational risks such as: any decline in our relations
with our key national account customers or the amount of equipment
they rent from us; our equipment rental fleet is subject to
residual value risk upon disposition, and may not sell at the
prices we expect; maintenance and repair costs associated with our
equipment rental fleet could materially adversely affect us; we may
be unable to protect our trade secrets and other intellectual
property rights; we are exposed to a variety of claims and losses
arising from our operations, and our insurance may not cover all or
any portion of such claims; we may face issues with our union
employees; environmental, health and safety laws and regulations
and the costs of complying with them, or any change to them
impacting our markets, could materially adversely affect us; and
strategic acquisitions could be difficult to identify and implement
and could disrupt our business or change our business profile
significantly; (4) risks related to the spin-off, which effected
our separation from Hertz Global Holdings Inc., formerly known as
Hertz Rental Car Holding Company, Inc. (“New Hertz”), such as: the
liabilities we have assumed and will share with New Hertz in
connection with the spin-off could have a material adverse effect
on our business, financial condition and results of operations; if
there is a determination that any portion of the spin-off
transaction is taxable for U.S. federal income tax purposes,
including for reasons outside of our control, then we and our
stockholders could incur significant tax liabilities, and we could
also incur indemnification liability if we are determined to have
caused the spin-off to become taxable; if New Hertz fails to pay
its tax liabilities under the tax matters agreement or to perform
its obligations under the separation and distribution agreement, we
could incur significant tax and other liability; the spin-off may
be challenged by creditors as a fraudulent transfer or conveyance;
(5) risks related to our substantial indebtedness, such as: our
substantial level of indebtedness exposes us or makes us more
vulnerable to a number of risks that could materially adversely
affect our financial condition, results of operations, cash flows,
liquidity and ability to compete; the secured nature of our
indebtedness, which is secured by substantially all of our
consolidated assets, could materially adversely affect our business
and holders of our debt and equity; an increase in interest rates
or in our borrowing margin would increase the cost of servicing our
debt and could reduce our profitability; and any additional debt we
incur could further exacerbate these risks; (6) risks related to
the securities market and ownership of our stock, including that:
the market price of our common stock could decline as a result of
the sale or distribution of a large number of our shares or the
perception that a sale or distribution could occur and these
factors could make it more difficult for us to raise funds through
future stock offerings; provisions of our governing documents could
discourage potential acquisition proposals and could deter or
prevent a change in control; and the market price of our common
stock may fluctuate significantly; and (7) other risks and
uncertainties set forth in our Annual Report on Form 10-K for the
year ended December 31, 2018 under Item 1A “Risk Factors,” and in
our other filings with the Securities and Exchange Commission.
All forward-looking statements are expressly qualified in their
entirety by such cautionary statements. We do not undertake any
obligation to release publicly any update or revision to any of the
forward-looking statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190624005699/en/
Paul Dickard Vice President, Communications
pdickard@hercrentals.com 239-301-1214
Elizabeth Higashi, CFA Vice President, Investor Relations
ehigashi@hercrentals.com 239-301-1024
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